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Satisfying results from food firms

December 22, 2006|From the Associated Press

Food makers General Mills and ConAgra reported solid second quarters and raised their guidance Thursday, and Wall Street greeted them like comfort food on a cold winter day.

Shares of both companies gained nearly 2% in a falling stock market.

ConAgra Foods Inc. had the most sizzle. Quarterly profit jumped 44% as the maker of the Healthy Choice and Chef Boyardee brands sold off a meats business sooner than expected, cut costs and got better results from its advertising. General Mills Inc. said profit rose 4% on growth across its businesses.

Prudential Equity Group analyst John McMillin said General Mills' performance was the more impressive.

"I think ConAgra did it on cost savings and share repurchases, and I think General Mills' numbers were more top-line driven," or based on increased sales, he said.

Sales in ConAgra's largest segment, consumer foods, were about flat at $1.8 billion in the quarter ended Nov. 26, although operating profit grew 17% to $286.7 million.

ConAgra said profit totaled $219.6 million, or 43 cents a share, compared with net income of $152.5 million, or 29 cents, during the same period last year. The company had repurchased shares in the quarter.

Shares of ConAgra rose 49 cents, or 1.8%, to $27.34.

General Mills, which makes Wheaties cereal and Yoplait yogurt, said revenue rose 5% to $3.47 billion from $3.29 billion during the same period last year.

The company earned $385 million, or $1.08 a share, up from $370 million, or 97 cents, a year earlier. Analysts surveyed by Thomson Financial had expected profit of $1.03 a share on revenue of $3.4 billion.

Shares of General Mills rose 96 cents, or 1.7%, to $58.95.

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